JP Morgan Chase Pimping GM – Chrysler Merger

JP Morgan Chase (JPMC) owns enough Chrysler paper to line the inside of the New Orlean Superdome. Not to mention a stake in GM. Hey! You don’t think… yes we do. And the fact that automotive analyst Himanshu Patel works for JPMC is more than slightly relevant when it comes to considering his opinions on said merger. Only not to Bloomberg’s Hyman, who presents his “Hell yes!” take on the merger without once mentioning the connection. “By saving Chrysler from a liquidity even, GM may also be able to get itself much needed secured bank financing,” the graphic reads. But wait, that’s not all! Patel also reckons the combined company would have more leverage over the United Auto Workers (they’re gonna need it). “Inicidentally” the news reader concludes, “Patel is the only one of the analysts who covers General Motors who has a buy rating on the stock.” Gee, I wonder why…


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  • OldandSlow OldandSlow on Oct 22, 2008

    The Bloomberg video mentions a government role in joining the two. This is Senator Carl Levin's part of the deal. JP Morgan Chase loaned Cerberus approximately 6 billion dollars to acquire Chrysler. Some of which was probably used to shore up the 51% share that Cerberus has in GMAC. JPM Chase was unable to repackage the loans as CDO's before the credit meltdown. Therefore, the loan portfolio is still on their books and probably as an under performing asset. Should Cerberus pull the plug on Chrysler, it will be write-down city. Citigroup is the other Cerberus player. Naturally, both JP Morgan Chase and Citigroup are advising Cerberus-Chrysler in the merger negotiations.

  • Pch101 Pch101 on Oct 22, 2008

    It's important to remember that securities analysts are really just an extension of the marketing department. Their job is to sell a story, even though they are allegedly supposed to provide objective advice. If a guy who worked for JPM were to appear on television and speak poorly of the merger, that guy would be fired immediately, even if his position was well supported. JPM has real money on the line, and it is in their best interests to make this option look appealing.

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